Very well put. Also highly troubling is the bullying of those furthest from work by agencies, because such people are less profitable.Treble whammy: out of work, disdain and/or bullying from the supposed helpful conratcte-in profiteers, and economic coercion and benefit sanctions from the govt for being so ‘unemployable’. The govt’s dogma assumes that these private agencies are competent too, not chiseling, and not perversely incentive driven, to which we might also add culturally and medically equipped, as most (including the health assessing contractor ATOS) evidently aren’t. Either that, or by contracting out, getting others to to the dirty, the Govt handily puts a little distance between itself and crapping on the poor, the ill, the marginalized. Only a cynic would take that last interpretation…

What is a market-based incentive, in this context? One market-based incentive for getting a job would be the existence of well paid job vacancies … on the labour market. Do you think that wouldn’t work well?

I think you mean that offering financial incentives to staff based on “job outcomes” hasn’t worked. That’s contract design, within an organization. It’s not a market.

(\pedantry)

Don:

I used to work for an organisation that ran a New Deal Voluntary Sector Option programme, although not in that arm of the organisation, and this fits the pattern I saw first hand.

During the first couple of years, payments from the DWP for the programme were spread across the full range of programme activities, which allowed the organisation to focus much of its work on supporting young people while in the programme and work with them on things like skills development, confidence building, etc. We were also able to be fairly choosy about the kind of work placements we put young people into and direct them into ones that offered the best possible prospect of either a job at the end of it or of gaining bankable skills and experience.

As a result, most of the young people we placed not only wound up in full time employment but they also tended to hang on to their jobs after the cash incentives tot he employer ceased.

From 2003 onwards, the government started to change the payment structure, back-loading more and more of it on getting job outcomes at the expense of funding other support.

My former employer actually took the risk of bringing in more staff to work on getting our clients into jobs while maintaining the level of front-end support. Many of the other providers didn’t and pulled out of their programme because the new funding regime made it too risky for them to continue to deliver the programme, allowing companies like A4E to move in and hoover up the vacated contracts.

It wasn’t that long before we started getting young people coming to us on the second or third referral in New Deal, having previously been through the programme at a private sector provider, where they’d been either propelled rapidly into a job they were unsuited for or packed off to an employer who only cared about the cash incentives. Either way, they’d been sacked no soon as the government’s bung ran out, spent another six months on the dole and wound up back in the programme.

Backloading payments on ‘job outcome’ only ever creates incentives for people to game the system, it’s not a good way to operate if you’re serious about getting people back into employment on a long term basis.

Unity- who pushed the changes in 2003? Was there a programmatic name for them or did they just ‘happen’? I see Andrew Smith was Secretary of State for Work and Pensions, but presumably it wasn’t him pushing through the changes but someone in his Civil Service team.

“the loss of support to people who may still need it to re-enter the labour market
because they lose entitlement to incapacity benefits”

This is such a huge problem, yet few politicians seem willing to grapple with it. I know a number of people on incapacity who could do more work than the system allows, but never enough to actually earn enough to make up for the loss of benefits.

Furthermore, the stigma of being or having been on benefits, particularly for things like mental illness, is a major barrier to employment for far too many people.